The next session of the Virginia General Assembly will convene in just under six weeks and some area legislators told officials this week that uncertain budget times may continue.
“The [main] challenge that we will have is budgetary as you are facing in local governments as well,” said Delegate Steve Landes (R-Weyers Cave). “The fact is that state revenues are not growing as we had anticipated that they would.”
Landes appeared with Delegate Dickie Bell (R-Staunton) Tuesday at a forum held by the Thomas Jefferson Planning District Commission (TJPDC), a group consisting of elected officials from Charlottesville and surrounding counties.
David Blount, legislative liaison for the TJPDC, said the commission has several legislative priorities for 2017. Many of them are related to protecting funding for localities at a time when the state is trying to close a projected $1.5 billion revenue shortfall.
“I know there will be a challenge for the General Assembly to totally protect local aid for localities, which is 42 percent of the state’s general budget in fiscal year 2017,” Blount said. “That will jump up to about 44 percent in FY2018.”
The uncertainty is caused by tax collections that are lower than expected.
“What happens at this point is anyone’s guess,” Bell said. “Right now it is such a roller coaster ride. We’re up one month and then we’re down the next month. We have to be careful what we promise in very hostile and volatile budgetary environment.”
Bell said Virginia has suffered the effects of reduced federal budgets through the sequestration process, which has meant less money for jobs in the defense sector.
“It has cost us a lot of high-paying jobs,” Bell said. “Unemployment rates stayed steady which is reasonable but those people are now working at lower-paying jobs. We are vastly underemployed across the state and that means payroll taxes are less and income taxes will be less.”
Bell said he hopes Congress will reconsider the next round of automatic budget cuts expected next October.
Landes, who serves on the House Appropriations Committee, said another the problem is that government costs keep going up.
“We’ve got something called Medicaid that’s mandated by the federal government for which we provide 50 percent of the funding,” Landes said. “It is growing at six to eight percent. Revenues, if we’re lucky, are growing at three percent.”
Bell, a former schoolteacher, said he believes the General Assembly will try to protect K-12 education.
“Higher education is a little bit of a different story but K-12 education, I think everyone wants to protect that I hope that we can make that happen,” Bell said.
“Education funding I do believe will be held harmless as much as possible,” Landes said.
Landes said pay raises for all state employees will not take place to close the shortfall, but there may be an effort to at least find some money to cover pay raises for teachers, but it would be minimal.
“We are going to try and look at what we can do for state police,” Landes said. “We may include something for sheriffs and local law enforcement but we just have to wait and see how much we have.”
In September, county school officials said they would uphold their commitment to a two percent pay increase for teachers at a cost of nearly $400,000. That would come from a contingency fund set up by the school board.
Bell said elected officials will have to rely on “creative and innovative things” while the economy remains flat.
“As far as localities go, everything is a target in this budget,” Bell said. “It’s a difficult time for us and I think everybody is going to be examined very carefully. There will be some more cuts. I don’t know they’re going to come from. I hope we can spare the localities. I think over the last several years we have done enough to you.”
Bell said he does not want localities to increase their property taxes.
“I think we need to reprioritize some of the spending that we have,” Bell said. “I know in local government it’s hard to do that.”
Landes said any changes made in Washington next with a Republican Congress and presidential administration will not affect Virginia’s next budget.
“We probably won’t see any positives or negatives from the federal budget standpoint until the 2018 session,” Landes said. “I do think we will try to do what we can do to mitigate budgetary impacts.”
Another legislative priority is a request to allow cities and counties to have equal taxing authority and another is land use management. This year, the General Assembly passed legislation restricting how localities can accept proffers from developers in exchange for rezonings.
“Basically, don’t take away our existing land use authority but give us some additional tools to work with,” Blount said.
Transient lodging is also another topic and Blount said language has been drafted asking that local authority over taxation be preserved.
Blount said the final TJPDC legislative program will be published soon. It is made up of requests from all of the localities in the planning district.
The General Assembly begins on January 11.